INDUSTRY RESEARCH
NORMS T
Challenging the
Operators must investigate new revenue channels to grow in 2013, says Mintel’s Michael Oliver
he UK health and fi tness clubs market has endured particularly tough trading conditions during the past
three years, as consumers have struggled to come to terms with their real disposable income contracting month- by-month due to a combination of fl at earnings growth and high infl ation. That’s not to say that some businesses haven’t seen growth, but as a whole the fi tness market has been relatively fl at. The mid-market segment has been
particularly affected, as consumers have traded down to the fast-growing number of budget clubs springing up all over the country. Clubs which target a more affl uent and older audience, and which have a greater emphasis on customer service, have found themselves to be slightly better insulated from the cold winds of austerity than others. Faced with reduced scope (and funding) for further signifi cant expansion of their operations,
operators have been forced to look at maximising the revenues from, and effi ciencies of, their existing estates. While there is undoubtedly further scope for improvement in these areas, the next few years are likely to be more about how the major health and fi tness operators can extend their brand outside the walls of their clubs, particularly in terms of penetrating the digital space with products like apps and services which can be accessed digitally from the home. These are some of the topline fi ndings of Mintel’s latest Health and Fitness Clubs - UK report, published in November 2012.
LIFESTYLE CHOICES Despite the tough trading environment, the market for health and fi tness clubs has held relatively fi rm, with only a slight reduction in total member numbers over the past three years – this despite the lingering effects of two recessions and a period of government-induced austerity. Our report predicted there would be 5.32 million gym members in the UK by the end of 2012. What this demonstrates is that, for
many consumers, their health and fi tness club membership is now regarded as an essential part of their lifestyle – something they are not prepared to give up. Instead, they are cutting back in other areas, such as food shopping and going out to pubs and restaurants.
Around one in six adults (16 per cent) now use a private health and fi tness club, with around three-quarters of these (12 per cent) being members and the balance using clubs on a pay- as-you-go basis. Refl ecting the maturity of the industry, almost 40 per cent of Brits have been members of a club at some stage, while just under a quarter (23 per cent) are lapsed members. On a positive note, around a fi fth (21 per cent) show an interest in becoming members in the future. Average revenue per member, which was boosted in 2010 and 2011 by two successive years of increases in the rate of VAT, is expected to have slipped back slightly in 2012 as a result of cutbacks in secondary spending, reduced joining fee income and the growth of more affordable budget clubs. By the end of 2012, total UK market value was expected to be around £2,650m, with an average revenue per member of £498. Regionally, the impact of unemployment and government austerity measures seems to have been most marked in the north of England, with the result that this part of the country has proved a fertile breeding ground for the budget health clubs sector.
FLEXIBILITY PLEASE Mintel’s research has found that fl exibility is the key to making health club memberships attractive to
THE NEXT FEW YEARS ARE LIKELY TO BE ABOUT HOW THE MAJOR FITNESS
RFID technology facilitates more fl exible membership options
OPERATORS CAN EXTEND THEIR BRANDS OUTSIDE THE WALLS OF THEIR CLUBS
66 Take part in the Health Club Management reader survey:
www.surveymonkey.com/s/NQDN2R6 January 2013 © Cybertrek 2013
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